5 Key Developments To Follow This Week

5 Key Developments To Follow This Week

1. Chinese PMI data will surprise markets Saturday's data showed shrinkage in China's factory activity at an unprecedented pace in February - even worse than during the 2008 global financial crisis. Surprisingly weak data can raise fears that the world's second-largest economy will not recover as fast as investors think. In the coming days, whether the epidemic will accelerate in the US, how ready the US government is to deal with a universal epidemic, and its harm in other countries will be revealed. Graham Tanaka, head of investment department at Tanaka Capital, based in New York, says, “the market is now uncontrolled. We do not know the limits and where to summit. ” 2. Fed and US data On Monday, Markit's US manufacturing activity surveys and the Supply Management Institute will provide investors with an opportunity to assess the economic impact of the virus. The non-agricultural employment data for February, which will be released on Friday, will be closely monitored for signs of strength in the labor market before the coronavirus becomes more widespread. The common forecast for the non-agricultural employment report, which was 225,000 in January, is up 175,000 this month. 3. Magnificent Tuesday As the US Democratic Presidential candidacy intensifies, 14 states will go to the polls on Tuesday. Market audiences will be waiting to see if progressive Senator Bernie Sanders will consolidate leadership or whether moderates like ex-Vice President Joe Biden or New York Mayor Michael Bloomberg will spread. The promises of the Sanders campaign to split large banks, take over pharmaceutical companies and remove private insurance in favor of a single state-run plan shook some investors. 4. Canadian Bank preventive rate cut expectation The Bank of Canada will hold its second last meeting on Wednesday before Stephen Poloz quits management. Increasing financial market volatility among the fears of coronavirus outbreak means that despite the strong domestic job market and inflation, which is roughly in line with the bank target, interest rate cuts have increased. Increasing concerns over the economic impact of protests against the coastal GasLink pipeline and severely affecting the country's rail network also supported expectations for interest rate cuts. 5. OPEC fights falling demand outlook In an environment where fears that the slowing global economy will hit energy demand are growing with the spread of coronavirus worldwide, their allies, including OPEC and Russia, will meet in Vienna on Thursday and Friday. On Friday, Brent and WTI fell to the lowest level seen since December 2018. On a weekly basis, Brent experienced the biggest weekly loss since January 2016, with almost 14% loss, while WTI futures declined by over 16%, the biggest percentage drop since December 2008. "As oil prices continue their free fall, OPEC + will have to apply deeper production cuts," said Edward Moya, senior market analyst at OANDA in New York. The group is already making 1.7 million barrels a day with an agreement that will last until the end of March. As a first response to preventing the effects of the virus, the OPEC + committee proposed an additional production cut of 600,000 barrels per day, but this figure is no longer sufficient for some members in the group.